If C 120 0 9y Yd Y Tr T T 100 0 1y I 500 G 600 Tr 200 X 700 And Im 300 0 2y A

if, C= 120 + 0.9Y, YD= Y + TR – T, T= 100 + 0.1Y, I= 500, G= 600, TR= 200, X= 700 and IM= 300 + 0.2Y

a) What is the value of marginal propensity to save?

  1. b) What is the value of the autonomous expenditure multiplier?
  2. c) Calculate the value of equilibrium level of real GDP?
  3. d) Suppose that the full-employment level of GDP is $5000m. State the type of output gap persistent in this economy and calculate its size.

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